What Harlem thinks about Whole Foods coming to the neighborhood

The new Whole Foods located on 125th in Harlem, New York. (Photo: Whole Foods)

There are moments when walking down the streets of Harlem can feel like it did 20 years ago. Elderly people chat while sitting on their stoops, locals sell their goods on the street, and the sound of children playing can be heard on most blocks: a real neighborhood feel that can seem outdated in much of Manhattan.

But in reality, the area has changed pretty dramatically. Particularly over the last 10-plus years, as new swanky new restaurants appeared, rents increased and new modern apartment buildings sprung up next to classic Harlem brownstones.

The neighborhood has been gentrifying at a steady pace, but a new addition threatens to accelerate the change. On Friday, organic upscale grocer (and recent Amazon acquisition) Whole Foods (WFM) opened its 12th New York location, in Harlem, located on the corner of 125th Street and Lenox Avenue. That corner is also known as the intersection of Martin Luther King Blvd. and Malcolm X Avenue, an unlikely intersection for a store often referred to as a luxury brand.

The intersection of the new Whole Foods in Harlem.

There is genuine excitement in the community about the new addition, but there is also a healthy dose of hesitation. Arlene Perry has lived in Harlem for nearly 60 years, and has had a front row seat to the area’s evolution. Part of what makes Harlem so special is the strong sense of community, something she fears could disappear with this new mega-store. “The Whole Foods is good to have, but it will affect all of the mom and pop stores I’m used to,” she told Yahoo Finance. “Growing up, we knew each other and they gave jobs to people in the community.”

One such business is Watkins Health Foods, which opened for business on 125th Street in 1950. The small store is simple, at times resembling a stock room filled with natural teas, supplements, organic foods and smoothies. It will be in direct competition with the new Whole Foods, which is located just half a block away. Robert Payton took the business over from his father in 1986 and is aware of the retail giant, but tells Yahoo Finance he’s not worried.

Small local businesses may take a hit as the national chain makes its presence known in Harlem.

“A lot of my customers already shop at Whole Foods too, and they told me not to worry, that they will keep coming to me,” he said. “We have been in the community for so long that we have established a history, so people like supporting us.”

For Whole Foods’ part, it’s doing everything it can to make sure its presence in the neighborhood is a positive one. The store’s team leader Damon Young says the company hired about 120 people from the Harlem area to work there, and hope to bring in even more as operations grow. When the store opens, the location on 125th Street will also feature 20 brands made locally in Harlem, like spices from Sylvia’s, Ginjan’s African beverages, and pies from the Harlem Pie Man. Local favorite Hot Bread Kitchen will also sell its goods there, and the store will employ several of their bakers.

Sauce from Mama Company, a local Harlem business, can be found on the shelves of Whole Foods.

“In Harlem we found so many classic businesses that have been around and young entrepreneurs who have cool ideas,” said Ted Kwong, spokesman for Whole Foods. “Throughout the company we do as much as we can do to cultivate and help local brands grow.”

Whole Foods, which is known to have higher prices than competitors, also said that it will offer more bulk bin offerings (like coffee and granola) which offer more value for less money. The store will also carry all of its all-natural 365 Everyday Value product line in the store.

There goes the neighborhood?

In New York City, the proximity of your apartment to the subway can impact how much you pay in rent. And Whole Foods has a similar influence, in fact, people call it the “Whole Foods effect.”

“New Yorkers like to buy their food on a day-to-day basis, they don’t stock up like other people do,” said Dave Maundrell, EVP of New Development at Citi Habitats. “So having that across the street or down the block to any real estate, it’s a driver that actually could push up prices. It’s basically a built-in amenity.”

Indeed, it’s no coincidence that Whole Foods has put down roots in the gentrifying neighborhood of Harlem —that’s kind of their thing.

Historic brownstones on Lenox Avenue in Harlem, New York.

In 2013, the grocer opened a store in downtown Detroit, which at the time was in the throes of rebuilding itself. According to the Detroit Free Press, median home sale prices in that zip code sprang from $19,000 in 2009 to $80,000 in 2015. Was this increase due purely to the introduction of the Whole Foods? Probably not. The median prices of homes in other areas also rose dramatically over that time. Did the national grocery chain make real estate more appealing and attractive to wealthier residents? It certainly didn’t hurt. Starbucks has a similar effect on real estate. Between 1997 and 2013, Zillow found that U.S. homes near the coffee chain increased in value by 96%. During that same period, all U.S. homes appreciated 65%.

The impeccable timing of Whole Foods has been seen in other cities as well. In 2011, Whole Foods opened a store in Boston’s Jamaican Plain, which at the time was home to many hipsters and working class Latinos. When the store opened in October 2011, the gentrifying neighborhood had a median home price of $342,000. According to data from Zillow, that number is now $574,400, an increase of more than 65%.

Now we get to watch what happens in Harlem. Rent prices in the new Whole Foods’ zip code have been steadily increasing since 2012, when Zillow says the average renter paid $2,513 a month. Today, the average rent is $3,309, about a 30% increase.

By comparison, the average rent in all of Manhattan was $3,148 in 2012. Today, the average Manhattanite pays $3,937 a month, a 25% increase.

Maundrell agrees that property values have risen tremendously in Harlem, with people taking a renewed interest in the neighborhood’s historic brownstones and wide sidewalks. After Whole Foods enters, he sees property values possibly increasing and more vendors coming to the area.

Keller Williams Realty named their Harlem team, SOHA.

In 2016, TJ Maxx and Bed Bath & Beyond opened stores half a block away from the Whole Foods construction site. At the time, Aurora Capital Associates (the real estate investment firm that owns the property) said the location was selected due to the “high volume foot traffic and proximity to the future Whole Foods complex.”

American Eagle Outfitters, Burlington Coat Factory and Olive Garden opened in the Whole Foods complex last fall.

Many locals will agree that parts of the neighborhood need an upgrade, and attitudes have been welcoming to new establishments that honor the rich and vibrant history of Harlem. At the same time, there has been pushback when developers have tried to take things too far.

Earlier this spring, residents were outraged when real estate professionals tried to rebrand the neighborhood as SOHA (meaning South Harlem). Harlem is known as a mecca of black culture, and real estate brokers were accused of renaming Harlem to remove any existing stigmas to make the area sound more appealing.

For residents, some changes to the community, like the addition of organic food, can be tolerated. Others, like stripping Harlem of its identity, cannot.

“People come here to live, but then they want to change everything,” said Perry. “When they wanted to change the name I was like, no. If you want to come here to live, it’s Harlem. If you don’t like it, take a hike.”